Data centers: Wallingford’s new currency?

By Lorraine Connelly for MyRecordJournal

A property at the corner of Tankwood Road and North Farms Road in Wallingford, Fri., May 21, 2021. A private company wants to build data centers on the site. A truck, bottom right, travels on North Farms Road. Dave Zajac, Record-Journal

If you tuned into Wallingford’s May 18 Town Council special meeting you might have thought you were watching a final episode of The Bachelor. Former State Senator Attorney Len Fasano (aka Chris Harrison) introduced Gotspace Data Partner Tom Quinn (The Bachelor) who was making a pitch for a “host agreement” with Ms. Wallingford. Other contestants include: Ms. Groton, Ms. Norwich, Ms. Griswold, and Ms. Bozrah. Who will take home the final rose?


If you feel you’ve missed a couple of episodes, here’s a recap. In March, Gov. Ned Lamont signed into law House Bill No. 6514, a measure that incentivizes data center operators to locate supercomputing facilities in Connecticut. The law, which goes into effect July 1, allows data centers that meet certain requirements to forgo state taxes on property, financial transactions, and other state fees, after construction. For data center operators to qualify for the tax exemptions, they must invest at least $50 million in their business within its first five years of operation, and $400 million (or $200 million if it’s located in a designated Opportunity Zone) to enjoy tax breaks for a full 30 years.


Gotspace Data Partners LLC, a Groton, Connecticut-based company, identified two possible Wallingford locations for the construction of up to five facilities: 57 acres of land behind Hilton Garden Inn near Interstate 91 and Route 68, and 205 acres on North Farms Road bordering Meriden, Tankwood Road and Route 15. It has been reported that between both hosting and utility agreements, a single building could generate between $3 and $4 million in revenue per year for the town.


The prospect of Wallingford being part of a new constellation of data centers across Connecticut is exciting. In the 19th century, Wallingford was home to a flourishing silver industry. International Silver Company produced about 70 percent of the silverware manufactured in the U.S. Although we have a diverse commercial and industrial base, ranging from technology companies to heavy manufacturing, our town hasn’t captured 70 percent of any single market since then. If data is emerging as the new currency of the 21st century, why shouldn’t Wallingford be in the vanguard?


UConn Professor of Finance and Economics Fred V. Carstensen is an ardent advocate of data centers and believes they are central to changing Connecticut’s economic future. “Core to that effort is reconnecting Connecticut to the data-driven, digitally dependent modern economy, from which the state largely disconnected after the 2008 recession,” he explained in a recent email conversation. “Central to this critical and damaging disconnection was the failure to develop a strong IT infrastructure, especially data centers.”


He emphasizes that while our neighboring states enjoyed robust recoveries and strong double-digit growth in core IT occupations, Connecticut saw virtually none. Adding, “All our job growth was in the low-skill, low-wage sectors like logistics (e.g. Amazon fulfillment centers) tourism, hospitality, and eldercare.” Carstensen posits that, unless Connecticut changes its current economic trajectory, the state will face massive deficits in FY 2026 with a strong possibility of no recovery before FY 2030.


With these prognostications, no wonder there is a rush for Wallingford to get on the data center bandwagon. But not so fast! At a wake last weekend, I was with relatives from Northern Virginia. When they casually asked, “What’s new in Wallingford?” I replied: “Data centers.” These massive facilities are popping up everywhere in their neighborhood, they lamented, eclipsing majestic views of the Blue Ridge Mountains. NPR recently reported on the data boom with roughly 70 data centers based in Loudoun County alone. These campuses snapped up “more than 320 megawatts of juice, enough to power between 23 and 40 homes for an entire year.”


Last December, Wallingford’s Planning and Zoning Commission proposed revisions to zoning regulations that would allow “data centers” to be incorporated into the language for permitted use in the IX corridor. These revisions have yet to be adopted. If the deal goes forward, P&Z will need to do its due diligence to protect the interest of neighbors on North Farms Road who will be most impacted by the new facilities.


Before we give Ms. Wallingford’s hand away in a host agreement, however, there has to be full public accountability. Gotspace is a relatively new player in a crowded field of real estate developers. How do we know if they will be able to attract the colocation of businesses reliant on data-processing? The wistful promise, “If you build it; they will come” seems insufficient.

During the 19th century gold rush, it was common for prospectors to bite gold coins to confirm whether or not the metal was real. Our Town Councilors need to sink their teeth into the town’s negotiations and find out if data — the new currency — is the real deal.






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Artcile Source: https://www.myrecordjournal.com/Opinion/Guest-Columns/ColumnConnelly-rj-060621.html